Please consider below comments in validation:

It is a well known fact that the wind projects are mainly installed considering CDM revenues and offsetting of tax liability of the company as a result of accelerated depreciation of 80%.

PPs cleverly do not consider the accounting tax offsetting in their companies while calculating the IRR. This is evident from the recently registered projects and those requesting registration which shows even major consultants like Ernst & Young do not present the actual financials with the PDD while proving additionality and hence abusing the Clean Development Mechanism.

The DOE is therefore requested to critically analyze how the accelerated depreciation benefit has been taken into account and confirm the accounting of the cash inflows as a result of the negative tax liability in the initial years. DOE should not be misguided by the financial presented by the PP or consultant which are custom made for CDM purposes and not the actual financial considered at the investment decision.

Note that considering cash inflows results in an increase in the IRR making wind projects a profitable venture.

Let me know if you have any queries/clarification.

Yours,
Babloo Singh

Submitted by: Babloo 

As noted from the Key Assumptions for Financial Analysis in Section B.5- Investment Analysis:

a)	Has the Project owner (PO) considered the tax holiday benefits while computing the IRR

b)	As noted from the CER price movements in 2009-10, the CER price had never reached as high as 17 Euros. Could the PO provide more details on the time period for which the CER price has been taken. As noted in the table, it is mentioned that 17 Euros is the prevalent market price. And if the PO considers 2009-10 to be the prevalent period, then the prices during this period has never gone as high as 17Euros. This needs to be very conservative, as this would have an impact on the IRR calculation with CDM.

c)	In the Prior Consideration of CDM, the PO has mentioned in the chronology that the decision to invest in the project was approved by the Board on 20th April, 2009. However in Annex-5, in Benchmark calculation, while determining the Risk free rate of return , the rate has been arrived at keeping in mind the fact that the Investment decision for the proposed CDM activity was taken in 2007-08. This contradicts with the chronology. Could the PO clarify when was the actual decision taken as
a.	If the decision was taken in the FY 2007-08, then as per EB meeting , any project before 2008, would not be eligible for registration with UNFCCC for carbon credit projects.In case of any project start date before 02.08.2008, the DOE would also need to assess the project particpants prior consideration of CDM using document reviews.
b.	If the decision was taken in 2009 as per the chronology, then the risk free rate would be wrong and this would impact the computation of the Benchmark rate.